Investor Pushes Sony to Take Entertainment Unit Public

TOKYO—For years Sony Corp. steadfastly defended the synergies of owning both an entertainment and an electronics operation. But the conglomerate's vision is being challenged by activist hedge-fund billionaire Daniel Loeb, who is proposing a partial spinoff of the entertainment division.

In a letter Mr. Loeb hand-delivered to Sony Chief Executive Kazuo Hirai on Tuesday, the founder of the hedge fund Third Point LLC urged Sony to sell off between 15% and 20% of its entertainment arm—which comprises its movie and music...